As Bitcoin mining enters a brand new chapter post-halving, HIVE Digital Applied sciences is taking a measured, bold strategy to progress.
On this interview, Darcy Daubaras, CFO of HIVE, affords an inside take a look at how the corporate plans to scale its hashrate to 25 EH/s by the tip of 2025 whereas sticking to its no-debt philosophy and conserving a detailed eye on operational self-discipline.
Daubaras explains how HIVE is balancing velocity with sustainability.
It’s fascinating to notice that HIVE’s story isn’t nearly mining. The corporate has additionally made an early transfer into AI and high-performance cloud providers, utilizing its inexperienced information facilities to diversify past crypto and construct long-term resilience. Daubaras explains how this twin focus between Bitcoin (BTC) and computing offers HIVE a aggressive edge, particularly as ESG issues and power prices dictate the winners and losers within the mining business.
For buyers and business watchers, it’s a uncommon glimpse into how one of many sector’s most forward-thinking corporations is positioning itself for the long run.
Beneath is the entire Q&A with Darcy Daubaras.
crypto.information: HIVE is endeavor a large hashrate enlargement with the objective of 25 EH/s by late 2025. You already hit 10 EH/s as of Might. Your objective nonetheless represents an extra improve of round 2.5x in capability. What are the most important execution dangers in scaling up this quickly, and the way are you managing these challenges to make sure you meet your 25 EH/s objective on time?
DD: Scaling to 25 EH/s is an bold goal, however we’re firmly on monitor. Nonetheless, fast enlargement at this scale naturally introduces execution dangers, together with world provide chain volatility, {hardware} logistics, and tight development timelines.
We actively handle these dangers by a mixture of disciplined venture planning, phased deployments, and powerful native execution. Our partnerships with trusted distributors and our native presence at every web site present us with essential visibility and management at each stage of the buildout.
In Paraguay, for example, our operations are led by Nation President Gabriel Lamas, a seasoned electrical engineer with over twenty years of expertise in large-scale infrastructure and power initiatives all through Latin America. Underneath his steerage, we’re developing high-performance, hydro-powered information centres designed for long-term reliability, grid effectivity, and sustainability. His deep understanding of power methods ensures that as we scale in South America, we aren’t simply rising rapidly, however with precision and resilience.
CN: Are there any financing challenges to scaling your operation, contemplating your ‘no debt’ stance? Will you deploy extra of your Bitcoin treasury or increase capital if wanted, or can HIVE proceed working in the direction of its objectives by operational money circulate? Talking of which, how do you determine when to carry mined BTC versus when to liquidate or use it for company wants?
DD: Utilizing Bitcoin from our treasury to fund progress offers us flexibility with out incurring debt; nevertheless, it requires disciplined timing and strong treasury administration. Given Bitcoin’s historic volatility, we’re cautious to construction transactions that present draw back safety and potential buybacks. We solely deploy BTC when it presents clear, accretive progress. Our objective is all the time to safeguard long-term upside whereas responsibly funding accretive enlargement.
CN: HIVE has aggressively invested in next-gen mining {hardware}, such because the S21+ Hydro ASICs in your fleet. I’m not going to fake to grasp what is occurring ‘underneath the hood’, however maybe you may clarify how these state-of-the-art, hydro-cooled machines give HIVE an edge over opponents by way of efficiency or unit economics? Are these instruments ample in your wants out of the field or do it’s good to discover additional in-house optimization to enhance effectivity and hash fee density?
DD: The S21+ Hydro ASICs characterize a significant leap ahead in mining effectivity, and we’ve made a deliberate guess on this expertise as a cornerstone of our subsequent progress part. Hydro-cooled ASIC miners are environmentally accountable resulting from their superior power effectivity and diminished environmental impression. Liquid cooling requires much less power than conventional air methods, reducing complete web site energy consumption and enhancing energy utilization effectiveness.. These methods additionally eradicate high-speed followers, reducing noise air pollution and making them extra appropriate for group integration. The steady thermal atmosphere extends gear life, lowering digital waste. Moreover, hydro-cooled setups are sometimes paired with renewable power sources like hydropower, additional minimizing carbon footprint. Collectively, these components make hydro-cooled miners a extra sustainable selection for accountable Bitcoin mining operations.
At HIVE, we see {hardware} as only one a part of the equation. It’s the way you deploy, tune, and handle that {hardware}, particularly at scale, that basically units leaders aside. As such, we’ve developed proprietary firmware optimizations that fine-tune voltage and frequency settings to push efficiency past manufacturing unit specs whereas sustaining power effectivity.
CN: HIVE reported an approximate 35% gross working margin in fiscal 2024. Nonetheless, because the 2024 halving, business economics have clearly tightened whereas community issue is at an all-time excessive. With that mentioned, what margin profile do you anticipate for HIVE within the coming quarters or full fiscal 12 months?
DD: Sustainability all through all market cycles is a core facet of our technique. At a Bitcoin value of $120K, our gross mining margin is roughly 65%, with a breakeven hash value near $20. Nonetheless, we function with one of the streamlined groups within the business, keep the bottom G&A bills amongst our friends, and are extremely disciplined in our capital allocation. This effectivity retains our value construction aggressive, enabling us to remain worthwhile even when Bitcoin falls beneath $100K.
CN: How does your diversification into GPU cloud providers or AI computing complement your core Bitcoin mining enterprise, or is that this only a pure enlargement? Do you envision HIVE’s inexperienced information facilities finally servicing a bigger share of AI, machine studying, or different cloud workloads as a hedge in opposition to crypto cycles, and may this turn into a major income stream or aggressive benefit for HIVE in the long term?
DD: Our entry into HPC and AI cloud providers isn’t a pivot. Actually, HIVE was the primary Bitcoin miner to launch an AI technique, seizing the chance proper after Ethereum transitioned to proof-of-stake. We repurposed our GPU infrastructure early and intentionally, providing high-performance, sovereign AI compute to enterprises, analysis establishments, and different mission-critical customers.
That foresight is paying off as BUZZ HPC is already reaching income milestones forward of schedule. As AI and information centre infrastructure more and more turn into nationwide safety priorities, we see huge tailwinds driving demand for trusted, inexperienced compute.
That is additionally good threat administration. When crypto markets soften, AI compute demand stays strong. Over time, we anticipate our inexperienced information centres to energy each the blockchain and AI economies. That twin engine offers HIVE a sustainable aggressive benefit and a pathway to long-term, diversified income progress.
CN: How are you getting ready for potential downturns or surprising shocks within the Bitcoin market? Do you make the most of any hedging methods to guard in opposition to value swings, or is HIVE primarily absolutely uncovered to Bitcoin with confidence that low prices and a robust steadiness sheet will carry you thru any bear market? Or, do you simply HODL and hope for the perfect?
DD: Our perception within the long-term worth of the Bitcoin community is central to our technique. Nonetheless, we handle threat by structural benefits corresponding to minimal debt, low working prices, and versatile treasury administration. Our fleet is designed to endure downturns with self-discipline. We might monetize BTC when it facilitates accretive progress, however we’re not pressured sellers. Our philosophy is easy: robust steadiness sheet, environment friendly operations, and long-term conviction.
CN: The Bitcoin mining sector as a complete is underneath rising ESG scrutiny from regulators, environmental teams, and even buyers involved about power consumption and carbon emissions. We’ve seen some jurisdictions take into account moratoriums or bans on mining (Paraguay’s debate being one instance), and miners at the moment are eager to show their local weather credentials. In your view, is the business doing sufficient to handle these issues? How is HIVE contributing to enhancing the narrative round Bitcoin mining’s environmental impression?
DD: The ESG debate in mining is legitimate, however it usually lacks nuance. HIVE has all the time been a renewable-first miner. Since our inception, we’ve prioritized inexperienced power in Iceland, Sweden, Canada, and now Paraguay. We consider the business should lead with transparency, correct emissions information, and proactive grid integration. We’re additionally working to shift the narrative: Bitcoin mining can present a internet profit to power methods by stabilizing grids, monetizing stranded energy, and supporting native communities. At HIVE, we assist that declare with motion and funding.
CN: Do you anticipate a shakeout forward, the place higher-cost or over-leveraged miners wrestle and community progress slows? How does an organization like HIVE place itself on this state of affairs? Are you getting ready to seize market share from potential drop-outs, and even to amass belongings/gear from distressed miners?
DD: A shakeout is just not solely possible, but in addition wholesome. The post-halving panorama has separated environment friendly operators from the remainder, and HIVE is uniquely positioned to profit. We run lean, keep away from leverage, and function at scale utilizing renewable energy. If distressed belongings enter the market, we’ll be opportunistic, however provided that they meet our stringent ROI and ESG standards. This can be a cycle the place resilience prevails, and that’s the place we’ve centered our technique.
CN: How does HIVE strategy web site choice and power procurement? Along with your massive Paraguay hydro initiatives, it appears you’ve locked in comparatively low-cost, renewable energy. Are you taking a look at different geographies with low cost energy for future enlargement, or do you’re feeling your present combine already supplies a aggressive sufficient power value profile?
DD: Vitality is essential in mining, and we’re exact in how we assess jurisdictions. We search low-cost renewable power, regulatory stability, and grid reliability. Paraguay meets all these standards and extra, which is why it’s now a key a part of our world fleet. Nonetheless, we’re not pausing right here. We’re actively investigating additional alternatives, as diversification aids us in mitigating geopolitical and operational dangers whereas securing low-cost power for the long run.
CN: Curious as a follow-up from the earlier query, if Paraguay is such a perfect location in your operation, why not base 100% of your operation there? What precisely is the good thing about geographical diversification?
DD: Paraguay is politically steady and affords considerable hydropower, which is why we selected to speculate there. Nonetheless, like several jurisdiction, dangers exist. These embrace regulatory modifications, limitations in grid infrastructure, and regional commerce dynamics. We’ve got constructed robust relationships with the federal government and work intently with native utilities to make sure alignment. By investing in grid upgrades and creating native expertise, we’re serving to to construct long-term resilience into our operations. Nonetheless, our objective is world resilience; whereas Paraguay is our flagship, our operational playbook stays multi-site and multi-country.
CN: Some buyers see (Micro)Technique primarily as a proxy for Bitcoin publicity slightly than a software program firm. On condition that HIVE additionally holds BTC on its steadiness sheet and now runs information facilities and HPC operations, how would you like buyers to view HIVE? Are you principally one half miner, one half digital asset infrastructure play, or a de facto Bitcoin ETF? Do you’re feeling the necessity to market your self as a extra balanced various to Technique’s ‘infinite cash glitch’ popularity?
DD: HIVE is a brand new breed of Bitcoin infrastructure firm. Lengthy earlier than the most recent wave of company Bitcoin adopters, HIVE grew to become the primary public firm to carry BTC on its steadiness sheet. In lots of respects, we helped outline the Bitcoin treasury mannequin.
Nonetheless, we’re not merely a hashrate story or a BTC proxy. We’re constructing renewable-powered digital infrastructure with two distinct, complementary monetization layers: Bitcoin mining and high-performance computing. Take into account us as a inexperienced information centre enterprise working on the intersection of blockchain and AI.
Not like firms specializing in short-term quarters, HIVE is devoted to constructing sustainable infrastructure for many years to return. We’re creating long-term monetary and digital sovereignty whereas offering buyers with diversified publicity to each decentralized networks and the compute layer powering the subsequent technology of innovation.
CN: Do you suppose there’s any room for strategic collaboration (or outright acquisitions) between mining corporations and treasury-heavy firms like Technique? Have you ever been approached by Technique for any discussions? Or are you too basically totally different on reverse sides of the Bitcoin ecosystem to create any synergies?
DD: We respect what Technique has constructed as a treasury-focused BTC car, however our fashions are basically totally different. As a conventional Bitcoin miner, we differ from Technique in that we generate Bitcoin by securing the community by high-performance computing infrastructure. Our enterprise mannequin depends on operational effectivity and power technique. In distinction, Technique is a software program firm that holds Bitcoin as a treasury asset. They achieve publicity by purchases, not manufacturing. Whereas each fashions profit from Bitcoin appreciation, miners actively contribute to the ecosystem, whereas Technique is primarily a strategic investor.. Whereas we haven’t had direct discussions with them thus far, we’re all the time open to exploring strategic partnerships in the event that they create worth for shareholders and align with our ethos of operational self-discipline.
